Tadaima User Documentation
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  • Welcome
  • Tadaima Co-ownership
    • Myths of Homebuying
      • Example 1: 20% Down Payment
      • Example 2: Waiting for a Job
      • Example 3: Timing the Market
    • What Matters When Buying
    • When You Can't Buy -> Co-own
    • Sequential Co-ownership
      • Component 1: Equity Share Agreement
      • Component 2: Assumptions and Release of Obligations Form
      • Component 3: Performance Lien
      • Component 4: Assumable Mortgage
    • Benefits of Co-owning
    • Use Cases of Co-Owning
  • Financials of Co-Owning
    • Why is it Worth it?
    • Understanding Real Estate Investing
      • Equity Explained
      • Cashflow Sources and Sinks
      • Real Estate Investment Modeling
    • A Service for the High Mobile
      • Transformation 1: Ownership Structure
      • Transformation 2: Transaction Temporality
      • Remapping our Transformations
      • Tadaima Investment Modeling
    • The Equity Model for a Tadaima Home
  • Next Steps
    • Schedule 1:1 with Tadaima
    • Prepare Financial Documents
    • Shop Available Inventory
  • Appendix
    • Housing Market History
      • Prior 1920s
      • FDR's New Deal
      • Recent Efforts to Increase Homeownership
    • Real Estate Concepts
      • Counterparty Risk
      • Lien Priority
      • Mortgages & Liens
      • Title & Deed
      • Co-Borrower & Co-Signer
      • Appraisals
    • Other Myths
      • Wait Till Marriage
      • Possibility of 2008 Again
      • Renting is Cheaper
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On this page
  • Homeownership Rates and Living Arrangements
  • Housing Types and Conditions
  • Home Prices and Financing Options
  • Social and Economic Factors Influencing Housing
  • Amenities and Living Standards
  • Why the 1920s Marked a Shift
  • The Big Picture
  1. Appendix
  2. Housing Market History

Prior 1920s

What Was Housing Like for the Average American Before the 1920s?

The housing landscape for the average American prior to the 1920s was vastly different from today.


Homeownership Rates and Living Arrangements

  • The U.S. Census data shows 45-50% of households were owner-occupied, but this reflected the legal owner of the home, not the individuals living within it.

  • The Federal Housing Administration (FHA) reported that only 1 in 10 people actually owned the home they lived in. This discrepancy arises because multi-generational and extended family living was common, where one family member legally owned the home, but multiple generations lived under the same roof.

  • In rural areas, families often built homes themselves or with local help, while urban workers rented apartments or lived in boarding houses.


Housing Types and Conditions

  • Urban housing was crowded and unsanitary, especially in immigrant-heavy cities like New York and Chicago.

  • Rural housing was simpler and often self-built, but lacked amenities like running water or electricity.

  • Indoor plumbing and electricity were rare luxuries, primarily for the wealthy or those in well-developed urban centers.

  • Heating came from coal or wood-burning stoves, and insulation was minimal.


Home Prices and Financing Options

  • The average home price ranged from $2,500 to $4,000, roughly $80,000-$120,000 in today’s dollars, depending on location.

  • There were no long-term, fixed-rate mortgages. Buying a home often required a 50% down payment, with short-term loans lasting 5-7 years.

  • Most financing came from private lenders, community networks, or local banks, often with high interest rates.


Social and Economic Factors Influencing Housing

  • The Industrial Revolution spurred urbanization, leading to crowded tenements in cities.

  • Racial and ethnic segregation was rampant, with restrictive housing covenants limiting where minorities could live.

  • The rise of railroads allowed wealthier families to move to suburban communities.


Amenities and Living Standards

  • Running water and sewage systems were uncommon in rural areas.

  • Electricity was rare outside major cities.

  • Kitchens lacked appliances, and homes had rudimentary heating systems.

  • Homes were typically constructed with hand-crafted materials but lacked proper insulation and modern plumbing.


Why the 1920s Marked a Shift

  • The rise of mass production techniques, such as those pioneered by Henry Ford, allowed for more affordable, factory-built homes.

  • The Federal Reserve's creation in 1913 stabilized banking, leading to more structured lending practices.

  • The introduction of longer-term mortgages with lower down payments in the 1930s and 1940s made homeownership more accessible.


The Big Picture

The low individual ownership rate (1 in 10) reported by the FHA reflects the financial reality of working-class Americans who couldn’t afford homes outright. However, the higher household ownership rate (45-50%) captured by census data reflects the shared living arrangements of the time, where one family member legally owned the home, but multiple generations lived together.

The shift to individual homeownership as part of the "American Dream" didn’t fully emerge until after World War II, when the FHA and GI Bill introduced long-term, low-interest mortgage options that allowed the working class to buy homes independently for the first time.

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Last updated 2 months ago